1. Processing USDA Foods

2. Processing: The conversion of USDA food or foods into a convenient, usable form by an approved commercial enterprise at a commercial facility. (known as an end product)

3. Four Value Pass Thru Systems – Part I Direct Discount Indirect Refund Sale Fee-for-Service Indirect Discount

4. Direct Discount Sale Processor sells and ships end product directly to an eligible Recipient Agency ProcessorSchool

5. Indirect Refund Sale Processor sells end product containing USDA Foods to a commercial distributor at commercial price, then distributor sells end product to an eligible RA at commercial price, plus delivery costs. RA or distributor submits sales to processor for refund of value of USDA Foods. Bulk CheeseCheese Pizza

6. Fee-For-Service Sale Processor charges by pound or by case for all other ingredients to make up the end product. Bulk Beef FC Beef Patties

7. Fee-For-Service thru Distributor Also known as Modified Fee for Service, where Distributor acts as the purchasing agent for the RA and invoices RA at the gross price excluding USDA Foods, plus distribution fees. Bulk BeefFC Meatballs

8. Indirect Discount Sale Also known as “NOI/Net-Off Invoice”, where Processor sells end product to Distributor at commercial/gross price and Distributor sells to eligible RA at a net price. Alaskan Pollock FishFC Brd Fish Fillets

9. Summary End Product Data Schedule Components SEPDS A SUMMARY END PRODUCT DATA SCHEDULE: For all donated foods excluding guaranteed minimum return. MANUFACTURER ABC National Summary Value Pass-Thru System (EPDS approved by USDA)THIS IS AN ORIGINAL SUMMARY SCHEDULE UNLESS CHECKED BELOW: Direct Sale State Summary Reflects Change in Formulation (Italic) Refund to Recipient Agency (EPDS approved by state agency) Additional Products Listed Net Price Through Distributor (NOI) Correction Fee for Service (billed by Processor) Fee for Service (billed by Distributor) Information Certified as Accurate from Approved EPDS (requires signature from agency that approved EPDS) Certified by State Agency End Product Code & Description Net Weight Per Case Servings Per Case Net Weight per Serving Item Code New WBSCM Item Code New WBSCM Description Commodity Inventory Drawdown per case By Products Produced* (none unless line is checked) Value per pound of commodity (contract value) Value of Commodity per Case (F x H) Effective Date State Agency Acceptance/App roval ABCDEFGHIJK A12345 Manufacturer A 4x6 Cheese Pizza30.00806 oz.B077100042 CHEESE MOZ LM PART SKIM UNFZ PROCESSR PK5.00 $1.3882$6.94 7/1/2006

10. Tracking Tools – Part II K12 Foodservice (15 processors) Processor Link (14 processors) Lunchline, Inc. (2 processors) Internal Systems (9 processors)

11. USDA Food Draw Down Targets “Ideal Schedule” MonthsYTD UsageRemaining Balance September 30 th 10%90% October 31 st 25%75% November 30 th 35%65% December 31 st 45%55% January 31 st 55%45% February 28 th 65%35% March 31 st 75%25% April 30 th 90%10% May 31 st 100%0%

12. Processing Resources ADE Food Distribution Webpage: www.ade.az.gov/health-safety/cnp/fdp FNS Food Distribution Webpage: www.fns.usda.gov/fdd/processing www.fns.usda.gov/fdd/processing USDA Foods Fact Sheet: www.fns.usda.gov/fdd/processing/cp_faqfacts.htm www.fns.usda.gov/fdd/processing/cp_faqfacts.htm Code of Federal Regulations to govern USDA Food Processing: www.fns.usda.gov/fdd/regs/fd_regulations.htm www.fns.usda.gov/fdd/regs/fd_regulations.htm RA Processing Handbook: www.commodityfoods.org/processing www.commodityfoods.org/processing